Employee Turnover – An inescapable cost?

Did you know?……

SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, et cetera, were considered.

Other sources provide these estimates: It costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees!

Two of the greatest myths regarding employee turnover are:

• It’s an inescapable cost of doing business.
• It’s an HR problem.

Neither of these myths are true. Sure, there will always be a bit of turnover in any business. And, yes, sometimes you will lose some of your better employees or greatest producers. In today’s tight job market, it is unfortunate that when there is a problem contributing to turnover, you will be more likely to lose the best employees because they can go elsewhere.  Those that don’t leave are more likely to be your lesser employees that don’t have the skills or reputation to go elsewhere. Unfortunately, it’s also likely that the employees with be blamed with less focus on the possibility that there is some internal contributor to this turnover.

What’s important to know is that this is NOT inescapable. There are things you can do to keep those best employees. And, while HR does need to be involved in employee retention, it is a greater challenge that needs to include top management.

Don’t wait for a crisis

Prevention is key!

Your options become greatly limited in times of crisis – when you’ve noticed that too many are walking out the door.

So what to do? There is much talk about employees needing to be valued and respected.  How do employees know they are valued or respected or how do they determine that they are NOT.

A colleague who works with companies struggling with turnover, mentioned that two things he wants to see, on his first visit to the site, are the rest rooms and the break room. He believes how these things appear and their cleanliness is a first indicator of how the employees treated.

Another issue, is over management. Micro-management tells your employees that you don’t trust them to get the job done. This does not engender confidence or motivation. The employee does not feel valued and certainly not respected.

Communication is paramount. And, not via e-mail but face to face with real discussion. It’s not just what is said but how it’s said. Is the only time your employees hear from management, when they make a mistake? Are they given well presented supervision?  Is there clarity in what is expected? Is there clarity about earning potential? A satisfied employee knows clearly what is expected from him every day at work. Frequently changing expectations causes anxiety and creates unhealthy stress.  These are all areas that can keep or lose an employee.

Note: This is not to say there should not be flexibility but rather a basic framework within the employees job description upon which they can depend.

Another way to show an employees value is to give them opportunities to shine. Are you utilizing the employee’s greatest strengths?  This not only is a benefit in productivity but also gives the employee confidence and a good feeling about coming to the job – no matter what level of work they are engaged in.

Along with utilizing employees skills and strengths goes the opportunity to grow and learn. Do you employees have the chance to learn new skills, without being overburdened upon return to the workplace or placing excess pressure on colleagues to get their work done?
Supervision is key! People leave managers and supervisors more often than they leave companies or jobs. Having a likable supervisor is good but not enough. Starting with clear and consistent expectations, the supervisor can make or break the employees sense of satisfaction. Anything the supervisor does to make an employee feel under-valued will contribute to turnover. Frequent employee complaints center on these areas.

–lack of clarity about expectations,
–lack of clarity about earning potential,
–lack of honest and productive feedback about performance,
–failure to hold scheduled meetings to maintain ongoing clarity, and
–failure to support an employees (legitimate needs,  ideas for growth, etc.) to upper management

Lastly, when an employee is struggling, how is it handled? Is the employee immediately blamed or is there also some focus on the systems that may be contributing to this struggle? Are they given the tools they need to succeed and given a chance to get needed training to improve. How this is handled can have a huge impact on moral, not only of the person struggling but those who are observing the process.

To learn more about how you can create an employee culture that flourishes with productivity and satisfaction please contact me at  gayle@gaylelasalle.com. or 518-225-6527.

Comments are welcome and encouraged!